Belt and Road initiative complements Sri Lanka’s vision
Prime Minister of Sri Lanka Ranil Wickramasinghe, stated that ‘Belt and Road’ complements the vision of Sri Lanka. He made the comments while stating that “Sri Lanka plans to use its strategic location and leverage on our connectivity to become the Hub of the Indian Ocean”. He comments came in his speech at the 2nd session of the Leader’s Roundtable of the Belt and Road Forum for international Co-operation in Beijing China on the 15th of May.
The Sri Lankan premier noted the various development projects that the government has undertaken, such the triple port development and the development of two international airports. He is quoted “These initiatives will transform Sri Lanka into a shipping, aviation and a logistics hub. Sri Lanka is also focusing on building the hard infrastructure such as the roads, water supply, power supply etc.”. He further went on to say “Several of these advanced infrastructure projects, including the Hambantota Port, the Mattala airport and the Southern expressway have been carried out with finances from the Chinese institutions such as the Exim Bank,”.
the “Belt and Road” initiative which has become china’s key focus, is based on five key priorities. Policy coordination, connectivity, unimpeded trade, financial integration and people to people bonds. China’s strategy is to improve policy coordination by engaging in intergovernmental cooperation in macro policies, to strengthen connectivity the process has been to ensure quality levels of soft infrastructure such as customs cooperation and investment. Financial integration is to be achieved through mechanisms such as signing agreements and leading the charge on jointly establishing new financial institutions for development. It also aims to expand people to people relationship by promoting cultural, academic and various other engagements.
China’s growing focus on OBOR is best highlighted by the recent growth in China’s trade with countries on the silk road which has been growing on average at 18.2% annually and accounts for 20% of China’s total foreign trade whereas china’s direct investments have risen to 9.27 Billion US dollars during the past decade, a growth of 44%. China had been involved in 46 billion US dollar China – Pakistan Economic Border (CPEC), Signing close to 33 deals in Kazakhstan, totalling 23.6 billion Us dollars. Also, China was also one of the leading parties in the establishment of the Asian Infrastructure Investment Bank which will focus on various development projects in the Asian region.
China is Sri Lanka’s second biggest trading partner and Sri Lanka’s strategic location provides a perfect opportunity to benefit off of the OBOR initiative. China has risen to become one of Sri Lanka’s top investors in recent times with the expectation that it will soon be among the top two.
Sri Lankan premier made a number of comments during his visit to the “Belt and Road” forum. He was quoted “We have undertaken the restructuring of our economy including financial stabilization, reviewing administrative regulations to cut red tape, lowering tariffs and introducing a simpler tax system.”
“These measures will fully integrate us with the Global Value Chain thereby obtaining the maximum benefits of the 4th Industrial Revolution.”
Also, he stated “We participated in the one belt one road summit. Countries attending the summit agreed on creating economic and trade relations and coordination among the participants. Each country is supposed to work according to this framework. He also made note of the fact the despite it was China who organized the summit the participation by both the IMF and the World Bank was a very healthy sign and it signaled that more institutions will join the initiative. He further commented “What is important for Sri Lanka is to take the next step in this direction. This road will not only improve infrastructure facilities but create the possibility to develop trade, industries and the economy and provide more employment.”
The continued deep and strong ties with China and with the “Belt and Road” Initiative from Sri Lanka signals that the Country is placed to benefit from a large scale maritime road network connecting China to the rest of the world. Furthermore, it is expected that there will also be large number of Chinese driven investments coming into the island nation and particularly the potential that will be generated through fully functional ports and full-fledged industrial parks will serve the country to expand rapidly in economical and production wise.
Another indirect benefit generated through this “Belt and Road” initiative is the rivalry China has ensued with India on domination of the Indian ocean. The increased competition to stake out a claim as the most influential nation in the region, India has increasingly begun to invest in Sri Lankan development projects which has ensured the government has been able to move ahead with many of its development plans without much difficulty. The increased competition is likely to contribute to larger scale development projects such as roads, industrial parks, aviation and naval industries. As most of these projects will establish newer and better equipped infrastructure Sri Lanka would soon have many opportunities to benefit and expand its economy in the coming future.
Also, added to the situation Sri Lanka has secured the GSP Plus concession and is expected to enter into an Economic and Technical Cooperation Agreement with India. The government is also working on establishing many FTA agreements with various countries as well and therefore the potential to become a regional and world hub is very feasible and within reach of Sri Lanka.
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